Typically wealthy individuals, business angels (or angel investors) aim to help entrepreneurial individuals succeed with a business idea by investing their own money. They are known as “angels” because they often invest in risky, unproven business ventures for which other sources of funds—such as bank loans and formal venture capital—are not available.

This private investor not only provides money but also generally is interested in becoming involved in the project by acting as a guide or mentor. They invest their time as well as provide connections to their larger network in order to help guide the entrepreneur in the new business venture.